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Electric-bill law heads to governor

Ken Dixon| on May 5, 2014

HARTFORD -- Provisions for sudden, predatory hikes in residential electric rates that have been hidden within contracts involving the state's deregulated power market would become more transparent with legislation approved Monday in the state House of Representatives.

The bill, approved 145-0 after a three-hour debate, was approved last week in the Senate and now goes to Gov. Dannel P. Malloy for his signature. It would force the 15 to 20 electric suppliers that have emerged in the deregulated market to communicate better with customers.

The legislation would allow residential customers to terminate their electric contracts to traditional suppliers with 72 hours' notice. It would also allow customers to go to competing electric retailers within 45 days -- around the time they are warned that variable rates are to rise.

The law would hit offending companies with penalties for misleading advertising and deceptive trade practices.

Lawmakers said the deregulated market has been marred by a few unscrupulous suppliers with low, so-called teaser rates that unexpectedly increase after only a few weeks to prices much higher than the standard offers from United Illuminating Co. and Connecticut Light & Power.

"A couple of pennies make a huge difference," said Rep. Lonnie Reed, D-Branford, co-chairman of the Energy and Technology Committee, who introduced the bill. "It's really in these companies' interests to make customers happy. Ideally, these should be customized deals. We wanted to get rid of the bad actors, but not kill this industry."

The market was deregulated in 1998, but took more than a decade for alternative suppliers to emerge.

Part of the spike in prices was attributed to the changing price of the natural gas that is burned for power. Lawmakers this session have complained that hundreds of thousands of customers who enrolled in new, non-traditional electric distribution services were suddenly hit with more expensive rates.

Initial rates of 6 cents to 7 cents a kilowatt hour have increased by nearly three times that amount after just a few weeks for many of the 700,000 customers who had left UI and CL&P for alternative providers, according to lawmakers.

Rep. Laura Hoydick, R-Stratford, ranking member of the energy committee, said consumers who want to play it safe can remain with UI or CL&P.

"If you feel a little risk-taking, you might want a variable rate," she said.

"Anybody who reads their bill closely and carefully will be in a good position to make an informed decision," said Rep. Jonathan Steinberg, D-Westport, vice chairman of the committee, who introduced an amendment that would have capped increases on rises in variable rates.

The debate was briefly halted and Steinberg withdrew his amendment, which was supported by the AARP. Nora Duncan, state director for AARP, said after the vote that lawmakers should have added more consumer protections.

"While the bill does provide some much-needed transparency, it doesn't go far enough to stop the kinds of abuses our members and other state residents have complained the most about," Duncan said.

If the bill is signed into law, introductory rates would have to continue for at least three months, and contract termination charges would be reduced to a maximum of $50.

Also, monthly statements would have to include the competing rates of UI and CL&P, and suppliers' agents dealing with the public would be prohibited from wearing clothing that suggests relationships that do not exist with traditional electric companies, government agencies or competing suppliers.

Reed said she is anticipating that a pending settlement totaling several million dollars on a legal dispute with a supplier could be used to fund more enforcement staff by the state's Public Utilities Regulatory Authority.

Rep. Richard A. Smith, R-New Fairfield, an attorney, joked that he can understand the legislation more easily than the average service contract. "Unless you're reading the fine print and pay attention to the up-charges, they can come back and haunt you," Smith said.

Smith and other lawmakers said a shortcoming in the legislation is the exclusion of commercial and business customers from the bill.

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"The increases that my constituents had represented a catastrophe," said Rep. Arthur J. O'Neill, R-Southbury, noting that his district includes many senior citizens living in all-electric condominiums, where their usual $500 monthly bills rose to $800 and more during the winter.

"This was not just a minor hiccup for my constituents, but in some cases a financial disaster," O'Neill said. "Consumers are going to have to be very alert, to baby-sit their contract along the way to keep track when that (rate) change is going to occur."